Alexium [ASX:AJX] [OTCQX:AXXIY] is a Perth-based chemical development company with offices in South Carolina.
This morning, they announced a deal that will see them supply US military forces with leading edge flame retardant fabrics.
Alexium has developed a chemical called Alexiflam™. It’s used as a fabric treatment, to make that fabric flame retardant. It’s marketed under different names, depending on which fabric it’s meant for. Ascalon™ is for nylon, Nycolon™ is for nylon-cotton blend fabrics, and Nuvalon™ is for poly-cotton blends. The exact way it works is a bit hush hush, for obvious reasons, including the fact that they supply the military. But if you have a look at their US patent application, the abstract says:
‘An enhanced protective cover includes a top and bottom textile layer and an air permeable, moisture-vapor-transmissive, expanded polytetrafluoroethylene membrane layer located between the two textile layers…The protective cover also includes a top layer coating or fibre treatment of a nano-ceramic material designed to increase the durability of the cover.
…Alternatively, the upper layer of the protective cover may incorporate ceramic coated fibers or ceramic co-extruded fibers, or carbon nanotubes. The protective cover may also feature a fire resistant application. The top textile layer may also include a permanent, highly breathable and highly durable electro-static discharge feature added to the inside of the layer by laying down a carbon based printed pattern on the inside of the layer.’
They’ve also got an Australian patent, which was granted in 2012. This patent explains how the coating sticks to the fabric. It’s pretty dense reading, but you can check it out here.
So basically, they’ve got a very broad, very detailed patent application to cover fabric treatments which create multi-layered protection. The ‘durability’ thing is part of what the military is after. They don’t want anything that’s easily scratched, melted, or transferred onto other surfaces.
Alexium orders to ship Alexiflam™ to Greenwood Mills in huge quantities. Greenwood Mills is a 115-year old company that makes fabrics for the United States Military, amongst other things.
Alexium already has strong links with the US military. For example, in December last year, they announced that they’d got a contract to make a new and improved flame resistant uniform for the US Department of Defense (DoD). In 2013, tests at a DoD-sanctioned facility showed an Alexium product (‘Cleanshell’) effectively repels live chemical warfare agents like sarin gas and mustard gas. That same year, they won a contract to supply the US Marines to develop fire-retardant fabric treatments. Other contracts came before that. In fact, Alexium has a whole affiliate — Alexium Government Solutions — to deal with military contracts.
But this deal is especially important. The president of Alexium, Dirk Van Hyning, explained why. He said that ‘Whilst we have a strong and healthy business in the commercial sector, the sheer size of the Defense market and the fact that our chemistries clearly fit with the stringent performance requirements for military grade FR [flame retardant] fabrics, makes the Defense sector another strong market for Alexium both in the US and internationally. This new customer, with operations in the Defense sector, is a key part of that overall strategy.’
Alexium CEO Nicholas Clark thinks it’ll also be good for their penetration into the commercial market. Greenwood Mills also makes things like denim for big American brands including Levi Strauss, Abercrombie & Fitch [NYSE:ANF], and Hollister.
So there you go — in a few years, you could be wearing military-grade super-jeans that can stand up to chemical warfare and make your bum look good.
Clark said that ‘This new customer shows not only the continuing growth in the range and size of our sales but also the increasing rate at which new orders are being received as the market in both the commercial and defense sectors become increasingly aware of the performance and cost benefits of our award winning environmentally friendly FR solutions.’
It seems investors aren’t 100% sure. Shares in Alexium opened down at $0.65 this morning, from Friday’s close of $0.665. But the price has been on its way up since about an hour after the announcement came out.
Source: Google Finance
[Click to enlarge]
By the way, if you’re looking for an innovative Aussie company to invest in, don’t miss Sam Volkering’s report ‘There Aussie Small-Cap Stocks for Every Portfolio’. In this report, Sam discusses a medical services company that’s at the cutting edge of diagnostics. You’ll also discover an IT services company that’s using ‘dark fibre’ to provide highly customised data transfer services. Click here to find out how to get your free copy of this report.
Contributor, Money Morning